Balance of power tilts in favor of self-sustaining startups

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Hi readers,

Gone are the days of growth at all cost, according to everyone in tech nowadays.

Over the past few months, I have had conversations with people from several startups, young and old, that are firm believers and supporters of the above statement.

Interestingly, this notion seems to have changed the dynamics between startups and VCs, I have observed.

Let me explain.

With the ecosystem going through a so-called tech funding winter, startups have been urged to significantly curb their reliance on venture capital for massive growth and their operational runways and instead strengthen their business models to be self-sustainable.

These calls have been heeded, and startups are now working to generate decent revenue with some even seeing profits.

To some of these startups, the ability to actually make money that covers and exceeds their expenses (what some refer to as “real business”) has left them pretty content. External funding, which is supposedly (and historically) indispensable for startups, begins to lose its appeal.

But given VCs’ new-found fondness for sustainable startups, these founders are being courted, more than ever, by opportunist VCs that promise future greatness for these companies (albeit with heavily diluted ownership and perhaps even control).

For heavily loss-making startups, going the VC route has always been their only chance of survival. But for sustainable startups, they have the luxury (or dilemma) of choosing which path to take.

It’s a huge decision to make.

— Ardi Wirdana, journalist at Tech in Asia

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Image credit: Timmy Loen